housing microfinanc: addressing home improvements and housing needs
TRANSCRIPT
2010 RBAP-MABS National Roundtable ConferenceHyatt Hotel and Casino, ManilaJune 2-3, 2010
Housing Microfinance, Addressing Home Improvements
and Housing NeedsTeresa Ganzon
Bangko Kabayan
GABAY Housing LoanGABAY Housing LoanBangko Kabayan’s Housing MicrofinanceBangko Kabayan’s Housing Microfinance
1. Additional working capital
2. Education
3. Medical purposes
4. House repair & renovation
5. Addt’l capital for farming activities
6. Car
Why Why HMF?HMF?
2005 MF Survey
✔✔✔
Feasibility of product because of higher demand for home improvement
Additional loan product for Microfinance Clients (market penetration)
Increase in no. of accounts for Account Officers
Client retention (because GABAY is an incentive loan for existing clients)
Why Why HMF?HMF?
Sample Flyer
ClientsClients(As of March 2010)(As of March 2010)
Number of accounts:Number of accounts: 267267
Total Releases:Total Releases: P 5,496,000.00P 5,496,000.00
Loan Portfolio:Loan Portfolio: P P 3,899,074.363,899,074.36
Ave. Loan Term:Ave. Loan Term: 10 months10 months
Ave. Loan Amount:Ave. Loan Amount: P 20,500.00P 20,500.00
Kitchen Improvement 31 11.6%Wall Finishing and Painting 45 16.8%Ceiling and Roof Improvement 23 8.6%Bathroom Improvement 16 6%Improvement of doors and windows 20 7.5%Floor finishing and Improvement 14 5.2%Water and Electric Supply 17 6.3%Additional Capital for House Construction 13 4.9%Home Improvement/Renovation (addt’l rooms) 61 22.9%Fence Improvement 9 3.4%Apartment 2 0.75%Other related projects (poultry, piggery, store) 16 6%TotalTotal 267267 100%100%
Type of ProjectsType of Projects
Developmental Developmental StageStage
STEP 1: Market Research was STEP 1: Market Research was conducted through the conducted through the support of MABSsupport of MABS
a) with two (2) days indoor a) with two (2) days indoor and actual field trainingand actual field training
b) preparation of draft product b) preparation of draft product manualmanual
c) FGD with BM’s, AO’s, c) FGD with BM’s, AO’s, Supervisors and selected Supervisors and selected respondents from the branchrespondents from the branch
Developmental StageDevelopmental StageSTEP 2: Training of Supervisors and Account Officers of Pilot STEP 2: Training of Supervisors and Account Officers of Pilot BranchesBranches
a) ina) in--house training with AOs and Supervisorshouse training with AOs and Supervisors
b) documentation and discussion of policiesb) documentation and discussion of policies
STEP 3: Manual Preparation and ApprovalSTEP 3: Manual Preparation and Approval
STEP 4 : Inclusion of Housing Microfinance in Loans Program STEP 4 : Inclusion of Housing Microfinance in Loans Program and General Ledgerand General Ledger
Introductory Introductory StageStage
•• Pilot test in two (2) branches Pilot test in two (2) branches
•• Zero availment on the first three (3) months of pilot testingZero availment on the first three (3) months of pilot testing
oo July is not a good month to start construction and repair July is not a good month to start construction and repair of housesof houses
oo AO hesitant to offer new product (new documentation AO hesitant to offer new product (new documentation requirement procedure for group lending)requirement procedure for group lending)
Introductory StageIntroductory Stage•• One time orientation without follow through in One time orientation without follow through in
process and procedure is ineffective for new process and procedure is ineffective for new products.products.
•• We pilotWe pilot--tested HMF during the peak season for loan tested HMF during the peak season for loan renewal of existing clients.renewal of existing clients.
•• Bangko Kabayan was not able to rollBangko Kabayan was not able to roll--out HMF on the out HMF on the 1st semester of 2009 and was delayed by six (6) 1st semester of 2009 and was delayed by six (6) months.months.
Introductory StageIntroductory StageProduct rollProduct roll--out was delayed because…out was delayed because…
..preparation & approval of Process and Procedure ..preparation & approval of Process and Procedure Manual took a lot of timeManual took a lot of time
..our MF department focused more on strengthening ..our MF department focused more on strengthening existing loan products to achieve growth for 2009existing loan products to achieve growth for 2009
..there was quite a number of scheduled renewals ..there was quite a number of scheduled renewals from existing clientsfrom existing clients
•• After the MABS roundtable on HMF, our Supervisors realized that HMF After the MABS roundtable on HMF, our Supervisors realized that HMF loans did not need to have large amounts and that simple house loans did not need to have large amounts and that simple house renovations could be accommodated.renovations could be accommodated.
•• Bangko Kabayan’s GABAY Housing Loan has shown remarkable growth Bangko Kabayan’s GABAY Housing Loan has shown remarkable growth since its pilot test (Sept. ’09)since its pilot test (Sept. ’09)
•• As of April 2010, it has total releases of P5.5 M, a portfolio of P3.9 M with As of April 2010, it has total releases of P5.5 M, a portfolio of P3.9 M with 232 accounts and 0.43% PAR.232 accounts and 0.43% PAR.
Moving Moving ForwardForward
BK HMF Loan Status BK HMF Loan Status PerformancePerformance
Continuous marketing of GABAY Housing Loan to all Continuous marketing of GABAY Housing Loan to all eligible MF clientseligible MF clients
RollRoll--out to regular depositorsout to regular depositors
Maintain zero percent (0%) PAR through proper account Maintain zero percent (0%) PAR through proper account managementmanagement
Continuous product innovationContinuous product innovation
Future PlansFuture Plans
Impact of HMF Impact of HMF
1.1. Bank and ManagementBank and Management Additional product to offer for the clientsAdditional product to offer for the clients
Good opportunity and competitive Good opportunity and competitive advantageadvantage
Additional loan portfolioAdditional loan portfolio
Impact of HMF Impact of HMF
2.2. Account OfficerAccount Officer Additional portfolio that may be Additional portfolio that may be
considered for incentiveconsidered for incentive
Helps the account officer acquire new Helps the account officer acquire new clients by offering good opportunities clients by offering good opportunities not only on their business but also in not only on their business but also in their status of livingtheir status of living
Impact of HMF Impact of HMF
3.3. Microfinance ClientsMicrofinance Clients Availment of additional (incentive) loan Availment of additional (incentive) loan
with a lower interest rate and a longer with a lower interest rate and a longer termterm
Diversion of funds for their business can Diversion of funds for their business can be avoidedbe avoided
Improve their status of livingImprove their status of living
Marigel LuzMarigel LuzLoan Amount: P 15,000.00Loan Amount: P 15,000.00
Project: Improvement of Kitchen and Bath RoomProject: Improvement of Kitchen and Bath Room
BEFORE AFTER
Marigel LuzMarigel LuzLoan Amount: P 15,000.00Loan Amount: P 15,000.00
Project: Improvement of Kitchen and Bath RoomProject: Improvement of Kitchen and Bath Room
BEFORE AFTER
BEFORE AFTER
Evangeline BanilaEvangeline BanilaLoan Amount: P 9,000.00Loan Amount: P 9,000.00
Project: Wall PaintingProject: Wall Painting
BEFORE AFTER
Nenita MagtibayNenita MagtibayLoan Amount: P 20,000.00Loan Amount: P 20,000.00
Project: Partitions of 2 Bed Rooms and Wall FinishingProject: Partitions of 2 Bed Rooms and Wall Finishing
Riza CapindingRiza CapindingLoan Amount: P 9,000.00Loan Amount: P 9,000.00
Project: Repair of Ceiling and Wall PaintingProject: Repair of Ceiling and Wall Painting
BEFORE AFTER
Mila RosalesMila RosalesLoan Amount: P 13,000.00Loan Amount: P 13,000.00
Project: Improvement of terrace precast and flooringProject: Improvement of terrace precast and flooring
BEFORE AFTER
Protacia LorzanoProtacia LorzanoLoan Amount: P 50,000.00Loan Amount: P 50,000.00
Project: Kitchen Improvement (flooring, walls, sink, Project: Kitchen Improvement (flooring, walls, sink, cabinet)cabinet)
BEFORE AFTER
Jasmin LatJasmin LatLoan Amount: P 50,000.00Loan Amount: P 50,000.00
Project: Construction of SariProject: Construction of Sari--sari storesari store
BEFORE AFTER
Edna HonradeEdna HonradeLoan Amount: P 40,000.00Loan Amount: P 40,000.00
Project: Construction of Ground Floor and additional roomProject: Construction of Ground Floor and additional room
BEFORE AFTER
Dulce MeranoDulce MeranoLoan Amount: P 15,000.00Loan Amount: P 15,000.00
Project: Fence Improvement and Water TankProject: Fence Improvement and Water Tank
BEFORE AFTER